Commonwealth Consolidated Acts Commonwealth Consolidated ActsThis Subdivision sets out the thin capitalisation rules that apply to general class investors (that is, entities that are not dealt with in rules set out in Subdivisions 820 - B, 820 - C, 820 - D or 820 - E). These rules deal with the following matters:
• how all or a part of the debt deductions claimed by the entity may be disallowed under one of three tests (the fixed ratio test, the group ratio test or the third party debt test);
• how the entity can choose to apply which one of these tests applies;
• where the fixed ratio test applies, whether the entity can claim a special deduction in respect of amounts previously disallowed under the fixed ratio test.
Table of sections
820 - 46 Thin capitalisation rule for general class investors
820 - 47 Choices under subsection 820 - 46(3) or (4)
820 - 48 Where entity is taken to make third party debt test choice
820 - 49 Meaning of obligor group etc.
820 - 50 Amount of debt deduction disallowed
820 - 51 Meaning of fixed ratio earnings limit and group ratio earnings limit
820 - 52 Meaning of tax EBITDA
820 - 53 Meaning of group ratio , GR group , GR group parent and GR group member
820 - 54 Meaning of GR group net third party interest expense , financial statement net third party interest expense and adjusted net third party interest expense
820 - 55 Meaning of entity EBITDA and GR group EBITDA
820 - 56 Special deduction for previously FRT disallowed amounts--fixed ratio test
820 - 57 Meaning of FRT disallowed amount
820 - 58 FRT disallowed amount is treated as zero where subsequent choice means fixed ratio test does not apply
820 - 59 When FRT disallowed amount is treated as zero for companies and trusts